Credit cards issued for debt collection

Increasingly, hospitals are giving patients a new way to pay their bills – with medical credit cards.

Those cards typically offer reasonable terms for patients who repay their debts promptly. AccessOne, a fast-growing Fort Mill, S.C., company that works with more than two dozen hospitals in the Southeast, lets patients repay without interest if they retire the balances within a year.

But the consequences of late payment can be severe.

Huntersville resident Sue Bostic said she doesn’t recall exactly how she wound up getting a credit card to pay off a $1,600 hospital bill from Carolinas Medical Center-Mercy.

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The AccessOne card carried an interest rate of 9.25 percent. But when she was late making a payment, she got a notice that the rate would climb to 18 percent if she did not pay by the due date.

“Why do they have to charge people who are sick 18 percent?” Bostic asked. “When they couldn’t afford insurance to begin with – they’re going to charge them 18 percent?”

Officials with AccessOne say their program is designed to give patients a convenient way to manage hospital bills and avoid the collections process. Enrollment is voluntary, they say.

Unlike some medical credit cards, AccessOne doesn’t report patients to credit agencies or bill collectors if they default on payments, its executives say. It simply returns the accounts to the hospitals that treated patients.

That, they say, is what happened in Bostic’s case. When Bostic wrote a letter objecting to the interest charges, AccessOne waived all finance charges and late fees, company officials said.

AccessOne President Rusty Salton, a family physician who launched the company 10 years ago, says his card helps both hospitals and patients.

“How many families can write a $2,500 or $5,000 check? Very few,” Salton says. “What I honestly believe is patients want to pay. But the hospital doesn’t give them a way to pay it. We’ve solved it.”

At the hospital, patients are given the option of signing up with AccessOne. The company doesn’t reject any applications, Salton says.

When patients enroll, the company puts them on a monthly repayment plan and charges the hospitals an administrative fee. That arrangement has helped hospitals increase their collection rates and lower the cost of collections, Salton says.

Carolinas HealthCare System, the Charlotte-based hospital chain that owns CMC, is AccessOne’s largest client. The hospital system collected $8 million through the program in 2009, says Greg Gombar, chief financial officer for CHS.

During its 10 years in operation, AccessOne has provided $270 million worth of financing to 400,000 patients, Salton said.